SEBI Consultation Paper on Expanding the Scope of Sustainable Finance Framework in the Indian Securities Market
SEBI through its consultation paper has proposed expansion of the sustainable finance framework in the securities market by introducing a new category of financial instruments. This category will include Social Bonds, Sustainable Bonds, and Sustainability-linked Bonds in addition to the current green debt securities. It aims to provide issuers with flexibility in raising funds for projects that align with environmental, social, and governance (ESG) objectives. These bonds will collectively be known as ESG Debt Securities. This will enable issuers to raise money for more sustainable projects, assisting in closing the funding gap for the Sustainable Development Goals.
The consultation paper also addressed the initial and continuous disclosures for sustainable securitised debt instruments that would be based on international frameworks. Initial disclosures could be made in the offer document for the securities, while continuous disclosures might be included in annual reports or other mandated formats.
SEBI also suggested that issuers of ESG debt securities and sustainable securitised debt instruments appoint an independent external reviewer or certifier, to facilitate transparency and credibility.
Comments may be submitted by September 06, 2024.
